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Marine Cargo Insurance: Operational Practice Problems in Cameroon World Maritime University The Maritime Commons: Digital Repository of the World Maritime University World Maritime University Dissertations Dissertations 1991 Marine cargo insurance: operational practice problems in Cameroon Yvonne Moune WMU Follow this and additional works at: https://commons.wmu.se/all_dissertations Recommended Citation Moune, Yvonne, "Marine cargo insurance: operational practice problems in Cameroon" (1991). World Maritime University Dissertations. 890. https://commons.wmu.se/all_dissertations/890 This Dissertation is brought to you courtesy of Maritime Commons. Open Access items may be downloaded for non- commercial, fair use academic purposes. No items may be hosted on another server or web site without express written permission from the World Maritime University. For more information, please contact [email protected]. WOE^LD maritime: UN I VEIRS I ty MALMb, SWEDEN marine: caroo insurance:: ore:rat I ONAL RRACTI ce: rrorlezms IN came:roon by MOUNE YVONNE CAMEROON A disBertation submitted to the World Maritime University in partial -fulfilment ‘of the requirements for the award of the: Degree of Master of Science in General Maritime Administration Year of Graduation 1991 I certi-fy that all material in this dissertation which is not my own work has been identified and that no material is included for which a degree has been previously conferred upon me. The contents of this dissertation reflect my personal views and are not necessarily endorsed by the University. World Maritime University Co-assessed by: Edgar Bold Professor Oceans Institute of Canada Visiting Professor World Maritime University DEDICATION Td my parents, Anne and Henri BOSSAMBO, Who made me the person I am and who will Always be present in my heart, despite thei Absence. To my husband, Jean-St^phane and To my children, Christian, Laurence, Gaetan Constant thought and love tor them gave me Strength to face this long, hard separation A c: Kisr O W L EOO EMEISTT S I take this opportunity to thank all those whose encouragement and guidance o-F any kind made it possible for me to attend the two—year General Maritime Administration course at the World Maritime University and to complete this paper. This is especially addressed to : - Mr Lawrence Pufong, my former Director at the Merchant Shipping Department, owing to whom the whole thing was made possible, - Mr Josu^ Youmba, whose guidance and advice were of great help, - My understanding and loving husband whose permanent support all along helped me to achieve this work, - My special brother, my sisters, and their families who have always shown so much concern. I take this chance to tell them how important that has been to me. - My two colleagues and friends in Cameroon who have always been so helpful and who I really missed whilst I was in Mai mb. I am sincerely grateful to the CIDA (Canada) which awarded me the fellowship for this two-year training. I would also like to thank all the professors and visiting professors in WMU for sharing their knowledge with me. This applies particularly to ; - Professor Jerzy Mlynarczyk who first encouraged me in writing on this subject and helped in its framing, - My course professor, assessor of this paper, for his guidance, - Professor Gold, who co-assessed this paper, for his very useful advice and guidance, - Mr Y. Boixel, the GMA lecturer, for his advice. Ill Many thanks also to the lELP staff and the Library staff for their devotion to their task, especially to Teresa who helped in many ways. Special thanks to the following who contributed to my completion of this paper : - Nore>: E<rokers Insurance Company in London, which enlightened my knowledge on marine cargo insurance practice during my on-the-job training, - The Manager of the Compagnie Nationals d’Assurances, whose book and newspaper articles were so useful, - The Cameroon National Shippers Council, for providing me with all the necessary documentation needed to complete this project, -All those.involved in the Cameroonian market of marine insurance whose interviews have helped to make things clearer to me. I cannot end this page without making a special mention of all the friends with whom I have spent these two long years and who have made them more bearable, especially Yvrose who shared most of this time with me. r 1 V FOREWORD My approach in this study will be that o-f "Candide" of Voltaire. I will address this subject from a layman’s perspective as a vigilant follower of the marine insurance market in Cameroon, and not in the viewpoint of an insurance professional or a maritime lawyer, what I am not. V T’ABL.H: OH' CONTENTS Acknowledgements .............. iii Foreword............................................. v INTRODUCTION 1 CHARTER I INTERNATIONAL TRADE. MARITIME TRANSPORT AND INSURANCE I“1 The Relationship Between the Three Concerns..., ? 1-2 Insurance: The Indispensable Tool..,........... 6 1-3 Incoterms and Insurance. ............ 8 1-4 Maritime Transport in Cameroon........... 10 1-5 The E;:ternal Trade of Cameroon........ 10 1-5.1 E;-:ports. ........ ...................... 12 1-5.2 Imports. .................... ................ 13 1-6 Marine Insurance in Cameroon...... ........... 15 CHARTER I I MARINE CARGO INSURANCE PRACTICE IN CAMEROON PART ONE THE INSURANCE MARKET IN CAMEROON II-l Regulatory System.... ............ .............-IS 11-2 Insurance Companies...................... 25 VI I1-2.1 Companies Under Cameroonian Law... I1-2.2 Complementary Companies........ 27 11-3 Rei nsLirance Company ................. 27 II-4 Intermediaries....................... 28 II-4.1 General Agents................. 28 11-4.2 Brokers................ ........ 29 II-5 Purchasers o-f Marine Cargo Insurance 30 PART TWO THE PRACTICE OF MARINE INSURANCE IN CAMEROON II—6 Insurance Policies............................ 11-6.1 Voyage Policy..... ....................... 11-6.2 Floating Policy....... ......... I1-6.3 Open Cover Policy........................... II-6.4 Shippers’ Third Party Liability Policy.... 11-7 Types of Risks............................... 34 11-7.1 Particular Average..... ............... 34 II-7.2 General Average....................... 34 11-7.3 War Risks, Strikes.......... CO 11-8 Insurance Covers............................... II-S.l "All Risks" Cover........... 11-8.2 "FAP Sauf" Caver........................... I1-9 Determination of the Premium Rate............. 36 II-9.1 Nature and the Value of The Cargo........... 36 11-9.2 Packaging..... ........................ 36 II-9.3 Type of the Vessel..... ................... 37 II-9.4 Condition of the Voyage.............. 37 II-IO Compensation of the Assured............... TO VI 1 c:h[af>th:r III MARINE CARGO INSURANCE PROBLEMS IN CAMEROON 111-1 Regulatory Difficulties......... 4: 111-2 Financial Problems............. ............... 45 111-2.1 Statement of Outstanding Premiums..... 45 111-2.2 Non-Payment of Claims ................... 47 111-3 Lack of Communication......... ....... 4S II1-4 Lack of Cooperation........................ 49 111-5 Ni strust of the F'ubl i c ..................... II1-6 Lack of Professionalism.................... 51 cfia.i=*te:er IV WHICH SOLUTIONS TO THE PROBLEMS ARE POSSIBLE ? Strenghtening of the Regulatory System...... 54 IV- Solutions to the Financial f-'robl ems„ 57 IV- , 1 Control of the Financial Situation of the Insurance Companies....................... 57 IV- :2 Statement of Outstanding Premiums......... 55 ,3 Security for Cl aims Payment............... 59 .4 Settlement of Claims Against Carriers..... 59 IV- Training of Insurance Professionals......... 60 IV- Ccopejration between Pr of essi onal s . .......... 62 IV- Improved Communication between Assured and Insurer/Broker ................................ :v-6 Public Awareness of the Importance of Marine- Cargo Insurance................ tt B tl R B 66 COKTCLUS I OIST VI 1 1 ANNEXES: 75 I Law No. 75-14 o-f 8 December 1975, rendering insurance o-f imports compulsory. II Decree No. 76-334 of 6 August 1976, relating to the implementation of Law No. 75-14 of 8 December 1975 rendering insurance of imports compulsory. III Ordinance No. 85-3 of 31 August 1985, relating to insurance business. IV Decree No. 87-639 of 9 May 1987, to fix the minimum amount of the registered or initial capital of insurance companies. SELECTED BIBLIOGRAPHY I NTF^ODUCT I ON It is commonly accepted that o-f all commercial activities, marine insurance is the most international" <V. Dover ; 1975, p. xii). This quotation is doubly true when specifically applied to marine cargo insurance. Marine Insurance is divided into two main branches which are : Hull Insurance and Cargo Insurance. Hull insurance strictly speaking concerns the vessels. The shipowners or carriers insure their vessels and more specifically the hull and the machinery. This is done by- insurance companies. At the same time, the shipowners will usually enter their^ vessel<s) in Protection and Indemnity Associations (PS<I Clubs) in which groups of shipowners join together to help each other on a mutual basis to meet the expenses of additional liabilities. In this study, I am not going to deal with hull insurance which, in the case of Cameroon, whose fleet is very small, does not pose any unique problem, according to the information I received from the national shipping company, Cameroon Shipping Lines. My intention is to focus on Cargo Insurance which is a significant concern for many involved in the movement of cargo in the marine mode in Cameroon. Indeed, in only one ship sailing from one port to another, there can
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